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Technology Stocks : Micron Only Forum
MU 345.82+0.2%3:59 PM EST
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To: Trey McAtee who wrote (23077)10/27/1997 4:37:00 PM
From: DavidG  Read Replies (3) of 53903
 
Trey,

<< from a sales perspective, i would agree that 16Mb is still the volume generation.
however, i do not think the asians are losing money on them. >>

<< .until the 4Mb generation MU was a nobody. 4Mb hung on longer than anyone
expected, allowing MU to make some good money. but 16Mb is now at or below
their costs. remember, we figured their costs to be around 4.50 during the summer
and they SAID in the last cc that further cost reductions would not be significant
because the product is mature. i think that MU is driving down 16Mb pricing to
delay the inevitable and is in effect propping up pricing on 64Mb parts, allowing
their competition to enjoy profitablity for a longer time. >>

Unbelievable... now you have the Asians making money on 16mb memory and Mu losing money. The asians already admitted they were losing money on 16mb DRAM and that MU was taking them to the cleaners. Also last quarter MU indicated their costs were $4.50 when the asians were a little over $5. How did they ever surpass MU?

Now.... since last week the game has changed where everyone will probably start losing on 16mb but I would venture to guess the asians will lose a lot more.

As far as 64mb I doubt the asians are making much if anything at all on 64mb. The prices of 64mb have been dropping to far and too fast and they probably will not recoup their investment. They were planning for an early crossover with 16mb and it hasn't happened yet. In fact... the way 16mb is dropping it may be later in '98 then they originally thought.

With the SEA debacle, the troubled DRAM business has only gotten worse and MU, TXN and other Semi Companies are now in serious trouble if a devaluation occurs. MU and TXN are good companies in a very lousy sector. It is much better to have lousy companies in a great sector right now.
Of course after today I am not sure there is any safe place to hide.

Good Luck Trading

PS: Carl you have some good postings that many acknowledge as reasonable facts. Don't let the "forever bears" sway you too easy.:)
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